Oil gains ground before US inventory data

Oil prices widened their gains in American trade after Libya suspended shipments from the Sharara oil field due to the control of armed militias, while gains are capped due to doubts that OPEC's output cuts might not be enough to balance the market next year. 

As of 13:35 GMT, US crude rose to $51.70 a barrel, while Brent climbed to $60.55 a barrel. 

US crude tumbled 2.4% yesterday, the second loss in three days, while Brent shed 3.1%. 

Libyan production is expected to tumble by 315 thousand bpd due to the cut-off in supplies from the Sharara oil field, with another 73 thousand bpd down from another field. 

Otherwise, last Friday, OPEC announced an agreement with Russia and other producers to cut output by 1.2 million bpd starting January, based on October levels. 

However, many are doubting how effective these measures are as the US continues to pump out record output, while global demand is expected to slow down markedly next year. 

Later today, the American Petroleum Institute will release initial data on US crude stocks, expected to increase for the third week in a row, while the EIA is scheduled to release the official report tomorrow.